Assessing the valuation implications of the eco-labelling of commercial property assets

Abstract

This article evaluates the valuation issues raised by voluntary and mandatory eco-labelling of commercial property assets. The role of appraisers in property investment markets and the objectives and methods of property valuations are discussed. The difficulties of incorporating the (potential) price effects of sustainable characteristics into property valuations are identified and evaluated. It is concluded that, although the evidence base for the benefits of eco-labelled buildings is robust, the evidence base to estimate price differentials between eco-labelled and non-labelled buildings is lacking. However, as the market penetration of voluntary and mandatory eco-labels increases, valuers are more likely to be able to obtain evidence of price effects. © 2009 Palgrave Macmillan.